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Debunking The Myths

I routinely take on the right-wing crowd here in my part of red-state Texas by countering their skewered views about Obama, health care reform, the economy and climate change. During my hiatus I still take time to respond to this crowd in the local newspaper’s Opinion page. Their arguments are so open to factual criticism that it doesn’t take much effort to knock down their straw man positions. The following is an example of these rejoinders.

You’ll first need to do a quick read in the Denton Record-Chronicle’s “Letters to the Editor” column today of Danna Zoltner and D.J. Anderson’s letters. Here are my comments found at the bottom of the page responding to these two.

To Mr. Anderson and Ms. Zoltner

The so-called “job creators”, who are sitting on plenty of revenue that could create jobs are doing so not because they’re waiting for Obamacare to be repealed or they’re uncertain of what the tax structure will be. These kind of things can be overcome when there is plenty of demand.

The economy will grow from the middle out by making sure you don’t reduce the middle class or their spending power. The unemployment problem isn’t the result of any imagined high tax rates but because there is insufficient spending to create demand.

Any economists worth his degree will tell you that demand is what creates jobs and when you kill public sector jobs as the only means of reducing the deficit you kill income from families who spend it in the private sector. As their spending reduces then their demand is taken out of the economy and eventually it impacts many private sector businesses that relied on dollars earned by teachers, cops, firemen, along with engineers and assembly line workers at companies who developed and built things that relied on government contracts to keep them profitable.

Rather than take money away from the middle class that are barely able to stay above water with wages that have increased only fractionally to that of income earners in the top 5% tier, why not tax that 5% during these difficult times who can better adapt, at least until the economy is back on its feet. The austerity measures that the GOP wants to impose have already proved to be a failure where they’ve been employed in Europe.

Trying to pay down the debt with spending cuts only in areas that benefit millions of Americans and that puts money back into the economy will fail as long as there is no effort to also trim the massive Defense budget or increase taxes prudently. Author David Korten says “our social deficits (rising poverty and inequality) and environmental deficits (starting with the climate crisis) do more to erode our society than the fiscal deficit does.

All this could be done without negatively impacting the income and thus the spending power of the middle class, the economists at the IPS assure us. By reinstating this spending, Mr. Anderson, is how you “build the economy from the middle class out.”

While corporate profits are at all time highs most of this money remains in the pockets of the very wealthy rather than creating jobs with. In fact, due to the European debt crisis it has been reported that now only 23 percent of the firms polled in June plan to add to staff in the next six months. This is down 13% from earlier this year in March and early April.

Back in 2010, while middle income families were losing their jobs and watching their paychecks and health benefits shrink, “American businesses sucked in profits at an annualized pace of $1.66 trillion between July and September. These profits allowed about a 6% increase in CEO pay last year while the average workers income increased only about 1%, “not enough to keep pace with inflation”.

And Ms. Zoltner, though you may be concerned that “the American taxpayer has gotten precious little for the administration’s investment in battery-powered vehicles, in terms of permanent jobs or lower carbon dioxide emissions”, efforts to change this are in play. Despite your mimicking of the naysayers, Ford, according to Bloomberg news, is “debuting five battery-powered models this year, spending $135 million to design electric-drive parts and double battery testing capacity”.

“Ford has said hybrids, plug-in hybrids, and all-electric cars will account for as much as 25 percent of its new vehicle sales by 2020, from less than 3 percent last year. The second- largest U.S. automaker is competing in the nascent market for electrified vehicles with Toyota, General Motors, Nissan and startups such as Tesla and closely held Fisker Automotive.

You know, it took years for the fossil fuel industries to finely provide abundant cheap energy. Efforts that required plenty of government subsidies along with private investments. I am curious why you and others who think like you, are not willing to allow the same to occur with clean, abundant alternate forms of energy.

They are part of the crowd that Bill Clinton eloquently pointed in his speech at the Democratic Convention earlier this month who are essentially saying, “We left [Obama] a total mess. He hasn’t cleaned it up fast enough. So fire him and put us back in.”

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8 responses to “Debunking The Myths”

Great post, Larry. I wish my local paper would give that much space for a letter. I agree with all on the money sitting on the side lines….b ut I think it is more than fear keeping them silent….investors are making money without having to do anything….so why bother creating jobs when they do not need it?

Gosh, we don’t get good letters to the editor either. My husband is still chortling over the disgusted reader who said the rubber band around his paper was too tight and he was cancelling. I guess you have more thoughtful people in Texas! lol

The idea that the job creators will do magic if they are given more money is indeed a fairy tale. When tax rates are too low on the wealthy they look to make more money as easily as possible — such as through derivative trade and bubbles. That did nothing good for the economy – quite the opposite. And in an era of globalization tax cuts stimulate economies in China and elsewhere — not necessarily here. The GOP mantra is simplistic and obsolete.

Great post, Larry. It is the most cynical of behavior to hold off on hiring, waiting for Obama to be defeated. I suspect this to be the case of many large businesses – hedging their bets while millions of hard working people suffer. I can’t imagine anything less patriotic – really, quite treasonous. The only fear they’re experiencing is one which has Obama re-elected. The only people still spending right now are the very wealthy – and I’m sure their spending is not helping the U.S. at all.